CBS wants to be an “audience company,” buys Last.fm for $280 million

CBS buys music and social networking site Last.fm, continuing its transition …

CBS has snapped up Last.fm for a cool $280 million. Launched in 2002, Last.fm combines Internet radio and music-focused social networking in a package that has attracted over 15 million users in over 200 countries. Its "scrobbling" technology enables it to build music taste profiles for each of its users and create customized playlists and offer recommendations.

The purchase of Last.fm is the latest in a string of investments and acquisitions by CBS as it attempts to extend its reach and influence online. CBS Interactive recently purchased Wallstrip.com and has made sizable investments in TV advertising firm Spot Runner along with Joost. CBS was also the first national broadcaster to ink a distribution deal with Joost.

Last.fm's demographic of younger music lovers is an attractive one, says CBS CEO Leslie Moonves. "Their demographics also play perfectly to CBS' goal to attract younger viewers and listeners across our businesses. Last.fm adds a terrific interactive extension to all of our properties and also is a huge step in CBS Corporation's overall strategy of expanding our reach online to transition from a content company into an audience company."

Content may be king, but without an audience, its reach is limited. All of CBS' recent acquisitions and licensing deals have been aimed at broadening the broadcaster's audience—a crucial task in an age of declining TV viewership.

CBS is also operating at the opposite end of the build vs. buy spectrum from other broadcasters. NBC and News Corp. (owners of Fox) decided to create a "YouTube killer" video distribution site in an attempt to retain the greatest amount of control possible over how their content is marketed while maximizing ad revenues. The risk is that new ventures like News Corp. and NBC's don't have much in the way of brand recognition, especially when compared to the sites they are trying to supplant.

CBS' strategy of buying up more established players and signing partnerships with others may not provide the same payoff in terms of control and revenue splits, but it definitely expands the company's potential audience.